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Public Statements

Energy and Water Development and Related Agencies Appropriations Act, 2013

Floor Speech

Location: Washington, DC


Mr. BROOKS. Mr. Chairman, I offer this amendment to address a shortcoming in the manner in which ARPA-E, the Department of Energy's Advanced Research Projects Agency for Energy, spends taxpayer dollars.

In August 2011, the Department of Energy Inspector General released an audit report that disputed costs incurred by ARPA-E award recipients. For clarity, an ARPA-E award recipient is a private company or entity that seeks operational cost reimbursement from Federal taxpayers.

The Inspector General disputes that private company expenses for ``meetings with bankers to raise capital'' and ``a fee to appear on a local television program'' are reimbursable costs that Federal taxpayers should pay for. The Inspector General report found that such spending violates Federal acquisition regulation subpart 31.2.

ARPA-E disputed the Inspector General's finding and argued that such costs are allowable under ARPA-E's statutory authority to fund technology transfer and outreach activities.

In February 2011, ARPA-E finalized Technology Transfer and Outreach guidance for awardees that explicitly encourages ARPA-E private company awardees to engage in and seek taxpayer reimbursement for these questionable expenditures.

More specifically, the policy states that acceptable taxpayer reimbursement activities by private companies include:

Marketing and other expenditures related to promoting an ARPA-E funded technology;

Consulting and other expenditures related to developing ARPA-E-funded technologies, building business and identifying potential users, markets and customers, e.g., business plan development, market research, and

Presentation and other expenditures relating to seeking additional funding from the private sector and government agencies.

ARPA-E guidance suggests the inappropriate spending identified by the Inspector General may be significantly widespread. At a January 2012 hearing, the Science, Space and Technology Committee's Subcommittee on Investigations and Oversight examined ARPA-E guidance in spending.

One day prior to the hearing, ARPA-E delivered to the committee an updated policy that omits mention of these questionable spending activities. Hence, ARPA-E's revision adds confusion, not clarity, to the pending question. In the absence of more explicit guidance consistent with the Inspector General's spending concerns, there is a significant risk to American taxpayers that ARPA-E private company awardees will incur costs that violate Federal regulations, yet which ARPA-E reimburses out of taxpayer funds.

On February 10, Subcommittee on Investigation and Oversight Chairman Paul Broun asked ARPA-E Director Majumdar to clarify in writing whether ARPA-E considers the activities mentioned in the original ARPA-E policy as allowable spending. Responses to these questions were due on February 24, 2012, but the Department of Energy refused to provide a response, a response which is now well over 3 months past the deadline.

This amendment does what ARPA-E should have already done, make it explicitly clear that the spending concerns identified by the Inspector General using taxpayer funds to raise private capital and using tax dollars to market, advertise, and promote private company-funded technologies are not allowable.

ARPA-E tax dollars should not go to private company advertising, marketing and ``meetings with bankers to raise capital.''

Stated differently, in this era of deficits and accumulated debt that threaten America with insolvency and bankruptcy, American tax dollars should not be used to pay for the operational costs of private sector companies, particularly when the Inspector General has already determined they are improper.


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